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BME posts €42.2 million net profit, up 27.9% year-on-year

The best quarterly result since 2010 and the best first quarter of the last 6 years

Revenue for the first quarter stood at €86 million, up 17.8% year-on-year

EBITDA increased by 27.2% to €60.9 million

The efficiency ratio is 29.2%, more than 21 points above the average for the sector

Return on Equity (ROE) was 41.1%, over 27 points above the sector average

The capitalization of the new companies admitted to trading on the stock exchange (€1.03 billion) is 15 times higher than in the first quarter in 2013

BME’s net profit for the first quarter of 2014 totalled €42.2 million, an increase of 27.9% on the year ago and 11.1% higher than the previous quarter. This is the third consecu­tive quarter of improved results. These are the best quarterly results since 2010 and the strongest first quarter results since 2008.

Quarterly revenue amounted to €86 million, up 17.8% year-on-year. Higher market trading volumes in the Equities, Settlement and Clearing units helped boost quarterly revenue while the Information, Derivatives and Fixed Income units also contributed to this improvement.

Operating expenses came in at €25.1 million in the first quarter, down 0.2% year-on-year. EBITDA for the same period was up 27.2%, at €60.9 million.

The efficiency ratio and ROE for the first quarter were 29.2% and 41.1%, respectively, 5.3 and 10.1 points improvement on the previous year.

The coverage ratio at the end of the first quarter was 113%. This ratio measures the company’s diversification into revenue sources not associated with market activity.

Earnings per share in the first quarter was €0.51 compared to the year ago figure of €0.40.

EQUITIES

At the end of the first quarter revenue for the Equity unit was €41.6 million, up 30% year-on-year. EBITDA totalled €31.8 million, a 42.6% increase on the year ago figure.

Trading volumes in the first quarter set a new high with 18 million trades, a 77.2% increase on the same period in 2013 and 16.6% higher than the previous quarter. Turnover totalled €190.7 billion, a 17.5% increase on the first quarter of 2013.

A market cap of €1 billion was raised in the quarter in new IPOs, 15 times higher than admissions in the first quarter of 2013.

SETTLEMENT

The Settlement unit’s revenue increased by 8.8% in the first quarter of 2014, to €20.2 million. Settlement revenues had the strongest increase with a 27.1% advance on the previous year. EBITDA amounted to €16.4 million, up 7.8% on the first quarter of 2013.

A total of 13.6 million operations were settled in the first quarter of 2014, 30.9% higher than the same period the previous year.

CLEARING

Revenue at the Clearing unit for the first quarter of 2014 amounted to €4.7 million, a 23.4% increase on the same period in 2013. Quarterly EBITDA was up 35.6% at €3.1 million, after operating expenses.

The Clearing activity, which involves the clearing and settlement of all financial derivatives traded on MEFF, also includes the clearing and settlement of electricity derivatives and trades with Fixed Income securities (reverse repos on Spanish Public Debt).

MARKET DATA

In the first quarter, revenue from the Information unit totalled €8.9 million (+9.4%) while EBITDA amounted to €6.8 million, a 9.2% year-on-year increase.

The total number of subscribers to information from primary sources improved in the quarter, turning around the previous trend. The number of users subscribing to the various types of information from primary sources rose an average of 14.5% year-on-year. The number of BME clients connected to market information reached a record high in the quarter, with the number of connections advancing 8.1% compared to the previous year, a reflection of greater interest for information on those markets managed by BME.

DERIVATIVES

The first quarter saw increases in all equity derivatives, with 11.7% year-on-year growth in total contracts traded. IBEX 35® contracts trading had significant growth in the quarter against previous year, to remark IBEX 35® futures were up 37.1% and IBEX 35® options advanced 46.5%.

Revenue for the unit now includes that received from trading and market access fees as the revenue accrued from clearing fees are now included in the Clearing unit. Figures from the previous year have been adjusted so that comparisons can be made.

In line with the trading volumes, revenue for the Derivatives unit in the first quarter totalled €3.2 million, 8.8% higher than the same period the previous year. EBITDA was €1.9 million, a 19.1% increase on the year-ago figure.

FIXED INCOME

Total trading volume in Fixed Income during the first quarter of 2014 was €415.7 billion, down 2.7% on the same period in 2013. It is worth noting the development of trading of Fixed Income on the electronic platforms (SEND and MERF). Turnover totalled €1.9 billion in the quarter (+23.6%), with the number of trades up 87.2%.

Revenue from trading in Fixed Income products were 72.7% of the unit in the first quarter of the year and amounted to €2.4 million, up 15.4% year-on-year benefitting from the increase of trading in public debt, fixed income cash trading and trading on electronic platform.

IT & CONSULTING

The various activities managed by the unit generated quarterly revenue of €3.8 million, a 14.6% decline on the first quarter of 2013.

Among the various areas which generated business in the quarter Confidence Net services results were 11% higher than the previous year.